Leaving aside for a moment that innovation and creativity in finance got the United States – and the world – into this problem in the first place, betting the future of any nation on its collective ability to come up with a whole lot of “new and useful” things in the space of an economic cycle seems to be a bit of a Hail Mary play. Industrial policy, regardless of how light or heavy the hand that applies it, has never been all that useful as a driver of innovation. Even corporations that spend billions on research and development wind up with very few useful innovations (look at the pharmaceutical industry), and many companies fail to capitalize on those they get as a result, for a myriad of reasons. (The case of Xerox Palo Alto Research Center and the graphical computer user interface is one notable example.)

There is simply too much serendipity in the innovative process to foment it efficiently. Even when you put really smart and creative people together with the facilities they need to innovate, the entire effort devolves into a numbers game. Throw enough brains together for long enough, the thinking goes, and something good is bound to come out of it all.

What America has going for it, of course, is momentum. Coming off of a national tradition for invention that began with Benjamin Franklin and Eli Whitney, somewhere just before World War II American inventiveness reached critical mass – literally and figuratively. Simultaneous discoveries and inventions across fields like physics, chemistry, aerospace, and electronics met mass production, marketing, mass prosperity and Keynesian economics. The resulting boom has carried the U.S. for seven decades – why should it not continue?

Sure, the government may be dysfunctional, Wall Street shell-shocked, and consumers in hock to their hairlines, but by gum, Americans still know how to come up with new stuff, make it cheap, and market the heck out of it. There’s hope for the Yanks yet.

Waiting for China to Start Innovating Again

The unspoken assumption here is that nobody else is anywhere near as good at that stuff than the Americans. Which is part of the reason the words “Chinese innovation” scares Americans.

It would be unfair to forget that a lot of companies hear those very words and think “in China, innovation is really imitation.” There is plenty of truth in that, and that thinking keeps a lot of intellectual property attorneys and trade negotiators well fed, clothed, and housed.

But the real pachyderm on the porch, the question that so many in the innovative industries will not allow themselves to ask, is “what if Chinese companies got it together and started to innovate? Then what?”

Questions like this are part of what is driving a wider audience to learn more about the life and work of Dr. Joseph Needham. A Cambridge master and biochemist, Needham spent much of his life and career compiling a history of Chinese science. He was an avowed sinophile, and as such much of his effort centered around an effort to prove that China before the Qing dynasty was the cradle of many of the world’s major innovations up to that time.

The underlying theme of his work was to disprove the chauvinistic hypothesis that Chinese as a race were capable of imitation but not innovation. In the main, he documented and catalogued Chinese innovations in an effort to demonstrate that the West – and the Industrial Revolution it birthed in the 19th Century – owed a massive debt to Chinese innovations.

(The Chinese innovation I heard about all the time when growing up was a metallurgical technique called the Lost Wax process of investment casting. My father’s foundry in California used that process in the 1960s and 1970s to make parts for turbochargers, airliners, golf clubs and medical implants. He was as proud of the heritage of the system as he was of its results. “Gee, Dave how do you make such amazing products?” “Ancient Chinese secret,” he said with an enigmatic smile. But we digress.)

The real pity about Needham’s work is that he spent so much time focused on what the Chinese invented and when they invented it that he had no time to figure out why the Chinese were such prolific innovators when they were, and how things changed to make that stop. This may have been because Needham was a monomaniac, or simply because he wasn’t a trained historian. Either way, it leaves us with proof that the Chinese can be great inventors, but without the historic perspective on what it will take to revive that latent spirit.

Innovation with Chinese Characteristics

Yet he points us in a compelling direction. So much of what is written about China and innovation today, whether by foreign or Chinese observers, is patronizingly prescriptive. If China wants to innovate, it must imitate – it must recreate the conditions that exist in high-tech hothouses of Silicon Valley, Boston’s Route 128 corridor, Austin, and Seattle. There is some truth in that, but there seems something unnatural about trying to graft San Jose onto Shanghai, or Federal Way onto Tianjin.

Needham’s work, on the other hand, hints at another road to an innovative future, one that is Chinese in origin, not Western. Perhaps the answer for China is to search for an answer to the independent innovation challenge in its own history, applying foreign lessons where appropriate.

What was it about those times that fostered innovation? Was it cultural? Was it economic? Was it political? Was it invasion or civil war that fed China’s inventiveness, or was it the luxury of peace and prosperity? Was the assimilation of some foreign culture the spark that set off periods of creative flowering, or did cultural homogeneity drive it?

These questions, and others like them, are the markers that will take us the next mile down the road that Joseph Needham walked, and will likely give us a better idea of when and how China will challenge America for innovation leadership.

In the meantime, I’m betting on Silicon Valley for green technology innovations, not China. But that’s another post.